Carnivore Gmbh requires a short-term deposit from an impending asset sale. They anticipate that they will be able to deposit 10.5m for four months from the 31st of August (it is now the 1st of March). The Finance Director has gathered the below information regarding possible hedges against an increase in the interest rate. S. 2.37% Sn (on the 31st of August) 3.13%4 3.25% F5x8 F4x6 3.27% F6x4 3.42% A Futures Price 97.31 97.04 (Bond size of 150k) Option prices (Current) (On the 31st of August) (Call Option with K = 3.35%) (Put Option with K = 3.35%) 4 0.17%/ 0.08%/ (a) With the benefit of hindsight which hedge should Carnivore Gmbh have taken (show all workings required to come to your conclusion)? (25 marks) Your answer should consider the following alternatives open to Vegan System Inc:- FRAs Futures Option (b) Critically assess the factors that influence call and put option prices (Max word count is 50 words) (5 marks) Carnivore Gmbh requires a short-term deposit from an impending asset sale. They anticipate that they will be able to deposit 10.5m for four months from the 31st of August (it is now the 1st of March). The Finance Director has gathered the below information regarding possible hedges against an increase in the interest rate. S. 2.37% Sn (on the 31st of August) 3.13%4 3.25% F5x8 F4x6 3.27% F6x4 3.42% A Futures Price 97.31 97.04 (Bond size of 150k) Option prices (Current) (On the 31st of August) (Call Option with K = 3.35%) (Put Option with K = 3.35%) 4 0.17%/ 0.08%/ (a) With the benefit of hindsight which hedge should Carnivore Gmbh have taken (show all workings required to come to your conclusion)? (25 marks) Your answer should consider the following alternatives open to Vegan System Inc:- FRAs Futures Option (b) Critically assess the factors that influence call and put option prices (Max word count is 50 words)